If a similar event happened today, then it's estimated that 20
million to 40 million Americans would lose power for something
ranging between 16 days and two years. This could cost the
economy an estimated $2.5 trillion.

Cordray writes that contingency plans for continuing business
activities following an event on the scale of Hurricane Katrina
or Sandy likely aren't enough to solve the problems posed by a
solar-type event causing a huge power outage.

And at the heart of this problem is the increased
"electronification" of our banking and payments system. Cash,
like gold, has now become something of a relic.

So for how we'd handle another Carrington Event-like
storm, Cordray says two questions need answering:

How does one ensure that sufficient cash is on hand during an
emergency?

How is cash going to be distributed and accounted for along
the supply chain with ATMs and bank offices and their core
systems inoperable because of no electricity?

"Addressing these
questions and others involves a monumental effort, and I don't
have a ready answer," Cordray writes.

He continued (emphasis added):

Fortunately, cash solves the problem for small-scale,
low-value payments during a long-term power outage. That
is, during the immediate, in-person exchange, it is an instrument
that doesn't require electricity, communication networks, or
computers.

This and other major calamities have always made me concerned
about the push in some quarters for a full transition to
electronic payments at the expense of payments less reliant on
electricity and our communication networks. As an
engineer by training, it is in my nature to wonder what can go
awry if failsafe systems aren't in place when the unexpected
happens.

In that letter, Singer called the chances of a Carrington Event
occurrence "far greater than most people think."

Cordray writes that the chances of such an event occurring within
the next decade are
about 12%.

Singer wrote that an EMP "stands all by itself" in terms of a
societal risk. And a similar solar event doesn't seem to stand
too far off.

So while Cordray's
picture of an economy slowed by a massive power outage is a bit
grim, I'd agree that more time spent thinking through seemingly
goofy hypotheticals is probably warranted over continued
nail-biting about whether the next 10% move in the S&P 500 is
up or down.